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PGMEDIA, INC. v. NETWORK SOLUTIONS

United States District Court, Southern District of New York


March 16, 1999

PGMEDIA, INC. D/B/A NAME.SPACE™, PLAINTIFF,
v.
NETWORK SOLUTIONS, INC. AND THE NATIONAL SCIENCE FOUNDATION, DEFENDANTS.

The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.

OPINION AND ORDER

Now pending before the Court are the motion of plaintiff PGMedia, Inc., d/b/a name space™ ("PGM") for summary judgment on Count VI of its second amended complaint, a claim for declaratory judgment*fn1; the cross-motion for summary judgment on Count VI of defendant Network Solutions, Inc. ("NSI"); and the cross-motion of defendant National Science Foundation ("NSF" or "the Government"*fn2) for an order staying this matter or, in the alternative, for summary judgment as to Count VI. For the reasons set forth below, PGM's motion is denied as to both defendants; NSI's cross-motion is granted; and NSF's cross-motion for summary judgment is granted.

Background

This complaint seeks to change the control of the vast network of computer networks known as the Internet. More specifically, it is a case concerning the authority to register domain names on the Internet. Domain names are something akin to mail addresses. But unlike real space, in cyberspace there is no logical connection between one's address and one's physical location on a defined map such that the address is easily discernable. Instead, in cyberspace one can choose virtually any domain name, with certain limitations. One limitation is that the domain name can end with one of only a handful of so-called top level domains ("TLD's").*fn3

There are currently seven generic TLD's ("gTLD's"): ".com," ".edu," ".gov," ".int," ".mil," ".net," and ".org." (Strawn Decl. ¶ 20.)*fn4 A complete Internet domain name consists of groups of alphanumeric characters, each known as a string, separated by a period, which is known and pronounced as "dot." The last string-the farthest to the right-is a TLD. (Graves Decl. ¶ 13.) Thus, for example, the Internet site for the Southern District of New York can be found at "usdcsdny.gov," and the domain name of National Public Radio is "npr.org." Each string can be up to 63 characters in length, but the overall domain name can be no longer than 255 characters. (Strawn Decl. ¶ 18.) There are approximately 2.4 million domain names with the .com TLD but less than 400,000 with .org, .net, .edu, and .gov combined. (Strawn Decl. ¶ 40.)

Computers on the Internet do not actually find each other using domain names like usdcsdny.gov. Instead, they use a number known as an Internet Protocol or IP number. Each entity connected to the Internet has one or more unique IP numbers, separated by periods; the overall IP number can be no longer than 12 digits. (Strawn ¶ 13.) When the Internet was first developing, the IP numbers were assigned and maintained by the late Dr. Jon Postel at the University of Southern California; this effort later became known as the Internet Assigned Numbers Authority ("IANA"), which still allocates IP numbers today. (Strawn Decl. ¶ 14.) Postel took on this task when he was a graduate student at UCLA, pursuant to a contract between the Defense Department's Defense Advanced Research Projects Agency ("DARPA") and UCLA. Management of Internet Names and Addresses, 62 Fed. Reg. 31741 (1998). In 1987, the Internet community agreed on a new protocol, announced in Request for Comments ("RFC") 1034, dated November 1987 and written by one P. Mockapetris. (Strawn Decl. Ex. B)*fn5, for associating named addresses with IP numbers so that users would not have to remember strings of numbers but could use words instead.*fn6 For example, the Southern District of New York Internet site can also be found by its IP number, 156.121.20.201.

The protocol announced in RFC 1034 is known as the Domain Name System ("DNS"). (Strawn Decl. ¶ 16.) DNS is a hierarchical tree structure (Strawn Decl. Ex. B §§ 3.1-3.3) and uses a distributed database. (Strawn Decl. ¶ 19.) That database is initiated by "root servers." When a user types a domain name such as "usdcsdny .gov," his computer must first match that domain name to its associated IP number in order to locate the Southern District's Internet site in cyberspace. The computer attempts to match the domain name to the IP number by sending out a an address query. The matching of an IP number to a domain name is known as DNS name resolution. (Strawn Decl. ¶ 25.) The match information (for example, that "usdcsdny.gov" can be found at 156.121.20.201) is stored on various Internet-connected computers around the world known as domain name servers. Thus, the goal of the address query is to find the particular domain name server which contains the match information the user is looking for. (Strawn Decl. ¶ 19.)

Address inquiries are processed hierarchically beginning with the TLD. The highest level of the DNS database is the root zone file, which directs a query to the TLD zone file, which contains information regarding the location of gTLD's and the ccTLD's. In the case of someone searching for "usdcsdny.gov," the root zone file will refer the query to a TLD zone file containing information about .gov domain names.*fn7 The .gov zone file then refers the query to a second level domain ("SLD") file which contains all the SLD entries under .gov. (Strawn Decl. ¶ 20-21.) This is where the usdcsdny.gov query ends: the SLD file has the information matching the domain name to the IP number. With the IP number, the user's computer can now connect him to the requested Internet location. The Southern District's home page will appear, just as if the user had typed in the IP number instead of the alphanumeric address.

A new user who wishes to have an Internet site with an alphanumeric address first must obtain an IP number from IANA or a registry or Internet Service Provider ("ISP") that has already obtained a block of IP numbers from IANA. (Strawn Decl. ¶ 23; Manishin Decl. Ex. 5 at 11.) For example, she may receive the IP number 1.23.456.7. She then registers her domain name-say, "judicial-lawclerks.com"-and it becomes associated with her IP number.*fn8 The information that judical-lawclerks.com can be found at 1.23.456.7 goes on the "A root server." There are a total of 13 root zone files in the Internet, named A through M; servers B through M download new domain name registration information on a voluntary*fn9 and daily basis from the A server. (Strawn Decl. ¶ 26; Holtzman Decl. ¶ 8; Graves Decl. ¶ 29.)*fn10 In this way, no matter which root zone file a user's computer utilizes to begin an address query, the query can be completed successfully-in other words, the domain name is successfully resolved. (Strawn Decl. ¶ 26.)

The issue at the heart of this case is who handles the registration of new domain names and places the information regarding new registrations on the A root server each day. The current registrar for new domain names under the .com, .org, .net, and .edu TLD's is NSI. (Graves Decl. ¶ 16.) NSI has provided these registration services since 1993 pursuant to a Cooperative Agreement with the NSF. (Strawn Decl. Ex. F.) Pursuant to Amendment 4 to the Cooperative Agreement, NSI charges $100 to register a domain name for a two year period and $50 a year thereafter. Of the funds NSI collects from these charges, it keeps 70 percent; the remaining 30 percent is "placed into an interest-bearing account which will be used for the preservation and enhancement of the `Intellectual Infrastructure' of the Internet in general conformance with approved Program Plans." (Cooperative Agreement, Amendment 4 (dated September 13, 1995), Strawn Decl. Ex. F.) As noted above, there are almost three million domain names currently registered under the four TLD's for which NSI handles the registration.

To understand how NSI became the registrar of certain TLD's, it is necessary to understand the history and development of the Internet. Before the Internet, there were two networks known as ARPANET and NSFNET. (Strawn Decl. ¶ 5.) The entities who used these networks were research oriented organizations-mostly within government, business, and academia. ARPANET users engaged in military research and received funding from the Defense Department ("DOD") and like agencies, while NSFNET users included ARPANET users plus scientific researchers receiving funding from NSF, other Federal agencies, universities, and corporations. (Id.) By 1995, those networks had generally been known as the Internet. (Id. ¶ 6.) The IP numbering system was established in 1983 as part of a network system software called Transmission Control Protocol/Internet Protocol ("TCP/IP"). (Id. ¶¶ 6, 13.) The NSF supported many of the original technical studies that developed the Internet Protocol. (Pl.'s 56.1 Stmnt. ¶ 7.) Over time, more and more institutions and sites desired to be connected to the network (Id. ¶ 8.) and those that did connect were required to operate in accordance with TCP/IP and other consensus-based network standards. (Id. ¶ 10.) The Internet Engineering Task Force (supra, note 5) began in 1986 and received NSF support. (Id. ¶ 11.)

Assignment of IP numbers and registration of domain names was initially the responsibility of IANA. (Id. ¶ 27.) The actual registrations were conducted by the Defense Information Systems Agency Network Information Center, operated by a military contractor. (Id.) In the late 1980's, NSF began to support registration services for the non-military network. (Id. ¶ 28.) From 1987 to 1991 IANA had a DOD contract to handle registration of IP numbers and domain names, with the actual registrations performed by SRI (until 1990) and Government Systems Incorporated ("GSI") (1991-1992); GSI subcontracted with NSI in March 1991 to perform the actual registrations. (Id. ¶ 29.)

On March 19, 1992, NSF solicited competitive proposals for three network information service managers: one to provide registration services for the non-military Internet; one to serve as a central directory and database service; and one to serve as an information service assisting new entities joining the Internet. (Id. ¶ 31.) The solicitation was issued pursuant to the National Science Foundation Act of 1950, 42 U.S.C. § 1861 et seq., as amended, and the Federal Cooperative Agreement Act, 31 U.S.C. § 6305. (Strawn Decl. Ex. D § I.)

NSI's bid to provide registration services was selected by NSF. On January 1, 1993, Cooperative Agreement No. NCR-9218742 ("the Cooperative Agreement") between NSF and NSI went into effect. Under its terms it was to expire September 30, 1998. (Strawn Decl. Ex. F.) Among other provisions, the Cooperative Agreement provided that:

    [NSI] has primary responsibility for ensuring the
  quality, timeliness and effective management of the
  registration services provided under this agreement.
  To the extent that NSF does not reserve specific
  responsibility for accomplishing the purposes of this
  Agreement, by either special condition or general
  condition of this Agreement, all such
  responsibilities remain with [NSI].

    NSF has responsibility for registration services
  support, support planning, oversight, monitoring, and
  evaluation. NSF will make approvals required under
  the General Conditions and, where necessary and
  appropriate, NSF will contact and negotiate with
  Federal agencies and other national and International
  members of the Internet community to further the
  efforts of this project.

(Id. Art.'s 6(A), 6(B)(1).) Under the Cooperative Agreement, NSI became the registrar for the .com, .org, .net, .edu, and .gov TLD's; IANA continued its role as overseer
of the allocation of IP numbers and domain name registrations. (Strawn Decl. ¶ 36.)

A March 1994 RFC by Jon Postel noted that IANA was responsible for the overall coordination and management of the DNS, and

  especially the delegation of portions of the name
  space called the top level domains. Most of these
  top-level domains are two letter country codes taken
  from the ISO standard 3166.

    A central Internet Registry (IR) has been selected
  and designated to handled [sic] the bulk of the
  day-to-day administration of the Domain Name System.
  Applications for new top-level domains (for example,
  country code domains) are handled by the IR with
  consultation with the IANA.

(Strawn Decl. Ex. H (RFC 1591) ¶ 3.) An August 1990 RFC, number 1174, specifically contemplated that the IR would serve as the centralized registration database:

    The IR would continue to be the principal registry
  for all network and autonomous system numbers. It
  would also continue to maintain the list of root
  Domain Name System servers and a database of
  registered nets and autonomous systems.

    In addition, however, the IR would also allocate to
  organizations approved by the Coordinating Committee
  for all Interncontinental Research Networking (CCIRN)
  blocks of network and autonomous system numbers, as
  needed, and delegate to them further assignment
  authority.

    It is recommended that, at least initially, the IR
  serve as the default registry in cases where no
  delegated registration authority has been identified.

    Copies of the aggregate Internet registration
  database(s) should be maintained by the IR and copies
  provided to each delegated registry to improve
  redundancy and access to this information. Updates to
  the database, however, would still be centralized at
  the IR with complete copies redistributed by file
  transfer or other means on a timely basis.

(Strawn Decl. Ex. G (RFC 1174) ¶ 1.3.)

The Cooperative Agreement specifically required NSI to "provide registration services in accordance with the provisions of RFC 1174." (Strawn Decl. Ex. F, Art. 3(C).)

In July 1996, PGM established its own network of 13 name servers to provide a domain name registry in competition with NSI's. (Garrin Decl. ¶ 9.) PGM has begun to accept domain name registrations under approximately 530 new gTLD's. (Id. ¶¶ 15, 20.) Some of these gTLD's are forpresident, formayor, and computers. (Id. ¶ 9.) According to PGM, its name servers are in compliance with all existing industry standards and protocols, but domain names registered under PGM's gTLD's are not universally resolvable. (Id. ¶ 12.) This is because they are not listed in the root zone files. (Id.) If NSI were to amend the root file on the A server to include PGM's gTLD's and the domain names PGM registers thereunder, then the root zone files on the other 12 root servers would receive the updated information and end users who typed in a forpreseident address would be connected to that forpresident address. But when the root servers do not recognize a top level domain name, the domain address cannot be resolved and the connection fails. (Id. ¶ 8.) In the words of the Commerce Department's National Telecommunication Information and Administration's ("NTIA") June 6, 1998 policy statement, "Universal name consistency on the Internet cannot be guaranteed without a set of authoritative and consistent roots. Without such consistency messages could not be routed with any certainty to the intended addresses." Management of Internet Names and Addresses, 63 Fed.Reg. 31741, 31742 (1998).

On March 11, 1997 PGM wrote to NSI requesting that NSI add PGM-registered domain names to "the Configuration File `named.root' running on your root name servers." (Manishin Decl. Ex. 8.) On March 12, 1997, NSI's outside general counsel responded to PGM's request saying that NSI

  acts as only one of a number of root name server
  administrators, but does not "control," as you put
  it, which data is input and resolved. Network
  Solutions, along with all of the other root server
  administrators located around the United States and
  in Sweden, takes its direction from, and is under the
  authority of, the Internet Assigned Numbers Authority
  (IANA), located at the University of Southern
  California.

    We, therefore, must decline to comply with your
  demand. We have, however, sent the original of your
  correspondence on to the IANA for its information and
  consideration.

(Manishin Decl. Ex. 9.)

On March 20, 1997, PGM filed its initial complaint in this action, naming NSI as the sole defendant, charging antitrust violations, and naming IANA as a non-party co-conspirator. (Compl. ¶ 5.) On March 27, 1997, NSI's counsel wrote to Jon Postel at IANA to seek confirmation that what NSI had told PGM in response to PGM's March 11, 1997 letter was correct, i.e., that "NSI maintains the information on that root-server under the authority and at the direction of the IANA and NSI can only make changes to the Configuration File at the direction of IANA." (Manashin Decl. Ex. 10.) On April 4, 1997, the general counsel of the University of Southern California*fn11 responded to NSI's March 27, 1997 letter stating:

  The statement made in your letter concerning the
  relationship between the Internet Assigned Numbers
  Authority ("IANA") and Network Solutions, Inc.
  ("NSI") is not correct. We are aware of no contract
  or other agreement that gives IANA authority over
  your client's operations. The IANA has no authority
  to establish a generic top level domain ("gTLD")
  without an Internet community consensus arrived at
  through committee review and ample opportunity for
  public impact. Instead, the restriction in expansion
  of gTLD's has thus far been due to consensus which
  your client has chosen to accept in refusing requests
  from potential registrars of new gTLDs.

(Manashin Decl. Ex. 11.)

On June 10, 1997, NSI's Internet business manager, David Graves, wrote to Don Mitchell, Cognizant Program Official for the NSF's Network and Communication Division, expressing concern over PGM's suit and other potential litigation over the TLD registration issue.

  Network Solutions finds itself in the difficult
  position of defending against antitrust claims that
  its server is an "essential facility" for Internet
  commerce, while at the same time privately and
  publicly supporting the addition of more TLDs to
  enhance competition. Further, Network Solutions must
  defend itself without any certainty as to whether it
  has the authority to accept or reject demands, such
  as PGMedia's, for the inclusion of additional TLDs.
  There are no technological restrictions or
  impediments to the inclusion of additional TLDs to
  our root zone file. Network Solutions has no interest
  in being the target of such actions, and, I am
  certain, the NSF does not want to become one either.
  In the absence of action, the number of lawsuits will
  likely increase as more demands for the inclusion of
  additional TLDs are received.

    Network Solutions has in the past reviewed and
  forwarded requests for new TLDs to the IANA. With few
  exceptions, the TLDs, however, were for new

  country code designations. Network Solutions
  consulted with the IANA before including those TLDs
  on our root zone file. However, in the face of the
  IANA's unwillingness or inability to accept any
  responsibility, and the impending legal threats, it
  appears that the decision process will be limited at
  least initially to Network Solutions operating in a
  responsible manner with NSF concurrence. We envision
  that the administration of Internet top level domains
  will need to be conducted in this manner during the
  Cooperative Agreement, while the future governance
  issues of the Internet evolve and mature.

    Under the above circumstances, we believe that
  additional TLDs should be included on our root zone
  file. We also believe that the addition of new TLDs
  will be beneficial to a more competitive environment
  and desirable for a further commercialization of
  Internet registration services at this time.
  Accordingly, it is our intention to announce publicly
  that on July 15, 1997 Network Solutions will begin
  accepting applications to include new TLDs on the
  root zone file from PGMedia, Iperdome, and other
  interested parties.

    By this letter, we seek NSF's concurrence in this
  action, and respectfully request your response no
  later than June 25, 1997, to allow us sufficient time
  to finalize our plan and to report to the Federal
  Court in the PGMedia suit. Network Solutions believes
  that it is imperative to proceed with the public
  announcement of this plan, and urges NSF's prompt
  consideration of an concurrence on the implementation
  process.

(Manashin Decl. Ex. 12.)

The NSF responded on June 25, 1997, and refused to concur in NSI's proposal:

  We appreciate the current and potential litigation
  burdens described in your letter and understand NSI's
  need to respond to the antitrust claims filed against
  it.

    As you are aware, the National Science Foundation
  is currently discussing with several federal agencies
  many of the governance and authority issues raised in
  your letter. We expect that these discussions will
  lead to greater stability of the Internet, especially
  since NSF has no plans to renew or to recomplete the
  Cooperative Agreement with NSI when it ends in March
  1998. However, no conclusions have as yet been
  reached with respect to the future of the Domain Name
  System or the creation of new TLDs, and it is
  generally felt that the addition of any new TLDs at
  this time would be destabilizing and premature.

    Based on the above, I am unable to concur with your
  proposed plan and process at the present time and
  must reject your request. The National Science
  Foundation also specifically requests that NSI take
  NO action to create additional TLDs or to add any
  other new TLDs to the Internet root zone file until
  NSF, in consultation with other U.S. government
  agencies, has completed its deliberations in this
  area and is able to provide further guidance.

(Manashin Decl. Ex. 13.)

On August 11, 1997, in response to a request by NSI for clarification of NSF's June 25, 1997 letter, NSF wrote:

    You asked whether this was intended to be a
  directive under the captioned cooperative agreement
  or merely a request by the Foundation that NSI
  refrain from adding new Top Level Domains at this
  time. It was the former.

    Under the cooperative agreement, NSI is responsible
  for the quality, timeliness, and effective management
  of the registration services and, I should say, has
  done a remarkable job considering the unanticipated
  explosive growth of the Internet community. The
  Foundation and NSI agreed that new TLDs would be
  added only in accordance with Request for Comments
  1591. (RFC 1591, of course, is the successor to RFC

  1174, which was invoked by paragraph C in the
  cooperative agreement's Statement of Work.) For NSI
  to act unilaterally in this regard is inconsistent
  with the terms of the agreement, since such
  unilateral action would be a significant project
  change, as defined in article 8 of the Foundation's
  Grant General Conditions [GC-1(5/94)], which is
  referenced in Article 6.B2b(2) of the cooperative
  agreement as modified by Amendment 01.

    As I indicated in my previous letter, NSF is
  currently discussing with several Federal agencies
  many of the governance and authority issues raised by
  David M. Graves' June 10, 1997 request that NSI be
  allowed to create additional TLDs. As part of that
  effort, the National Telecommunications and
  Information Administration of the Department of
  Commerce on July 2, 1997 solicited public comments on
  Registration and Administration of Internet Domain
  Names [62 Fed.Reg. 35896 (1997)] with a response
  deadline of August 18, 1997. Addition of any new TLDs
  in the midst of this national policy formulation
  would be at best premature and at worst
  destabilizing. Consequently, the Foundation will not
  approve such action.

(Manashin Decl. Ex. 15.)

On September 11, 1997, PGM filed a second amended complaint.*fn12 The second amended complaint added NSF as a defendant, charged NSF with violating PGM's rights under the First Amendment, and added a Count VI in which PGM seeks declaratory judgment against both defendants.

Meanwhile, as the NSF indicated in its letters to NSI, various Federal agencies were working together to study domain name problems. (Strawn Decl. ¶ 46.) On July 1, 1997, "as part of the Clinton Administration's Framework for Global Electronic Commerce, the President directed the Secretary of Commerce to privatize the domain name system (DNS) in a manner that increases competition and facilitates international participation in its management." (NSI Ex. 10.) On July 2, 1997 NTIA issued a request for public comments on "the current and future system(s) for the registration of Internet domain names." Request for Comments on the Registration and Administration of Internet Domain Names, 62 Fed.Reg. 35896 (1997).

  The enormous growth and commercialization of the
  Internet has raised numerous questions about current
  domain name registration systems. In addition, the
  present system will likely undergo modification when
  the National Science Foundation's Cooperative
  Agreement (NSF Agreement) with Network Solutions Inc.
  to register and administer second-level domains for
  three top-level domains expires in 1998. Resolution
  of these issues will also affect the future operation
  of the National Information Infrastructure (NII) and
  the Global Information Infrastructure (GII).

    The United States Government played a central role
  in the initial development, deployment, and operation
  of domain name registration systems, and through the
  NSF agreement as well as Defense Advanced Research
  Projects Agency (ARPA) agreement(s) continues to play
  a role. In recent years, however, Internet expansion
  has been driven primarily by consensus rather than by
  government regulation. Many believe that the
  Internet's decentralized structure accounts at least
  in part for its rapid growth.

    The Government has supported the privatization and
  commercialization of the Internet through actions
  such as the transition from the NSFNET backbone to
  commercial backbones. The Government supports
  continued private sector leadership for the Internet
  and believes that the transition to private sector
  control should continue. The stability of the
  Internet depends on a fully interconnected

  and interoperable domain name system that must be
  preserved during any transition.

    Various private sector groups have proposed systems
  for allocating and managing generic top level domains
  (gTLDs). The Government is studying the proposals and
  the underlying issues to determine what role, if any,
  it should play. The Government has not endorsed any
  plan at this time but believes that it is very
  important to reach consensus on these policy issues
  as soon as possible.

    The United States Government seeks the views of the
  public regarding these proposals and broader policy
  issues as well.

Id. Over 430 comments were received. (NSI Ex. 10.) On February 20, 1998, NTIA published a proposed rule. Improvement of Technical Management of Internet Names and Addresses, 63 Fed. Reg. 8826 (1998). The proposed rule called for the transfer of Internet DNS management to a private not-for-profit corporation but proposed that during the transition period that five new gTLD's be added to the DNS. Id. at 8829, 8831.

    Management of number addresses is best done on a
  coordinated basis. As technology evolves, changes may
  be needed in the number allocation system, these
  changes should also be undertaken in a coordinated
  fashion.

    Similarly, coordination of the root server network
  is necessary if the whole system is to work smoothly.
  While day-to-day operational tasks, such as the
  actual operation and maintenance of the Internet root
  servers, can be contracted out, overall policy
  guidance and control of the TLDs and the Internet
  root server system should be vested in a single
  organization that is representative of Internet
  users.

    Finally, coordinated maintenance and dissemination
  of the protocol parameters for Internet addressing
  will best preserve the stability and
  interconnectivity of the Internet.

    We propose the creation of a private,
  not-for-profit corporation (the new corporation) to
  manage the coordinated functions in a stable and open
  institutional framework. The new corporation should
  operate as a private entity for the benefit of the
  Internet as a whole. The new corporation would have
  the following authority:

    1. To set policy for and direct the allocation of
  number blocks to regional number registries for the
  assignment of Internet addresses;

    2. To oversee the operation of an authoritative
  root server system;

    3. To oversee policy for determining, based on
  objective criteria clearly established in the new
  organization's charter, the circumstances under which
  new top-level domains are added to the root system;
  and

    4. To coordinate the development of other technical
  protocol parameters as needed to maintain universal
  connectivity on the Internet.

    The U.S. government would gradually transfer
  existing IANA functions, the root system and the
  appropriate databases to this new not-for-profit
  corporation. This transition would commence as soon
  as possible, with operational responsibility moved to
  the new entity by September 30, 1998. The U.S.
  government would participate in policy oversight to
  assure stability until the new corporation is
  established and stable, phasing out as soon as
  possible and in no event later than September 30,
  2000. The U.S. Department of Commerce will coordinate
  the U.S. government policy role. In proposing these
  dates, we are trying to balance concerns about a
  premature U.S. government exit that turns the domain
  name system over to a new and untested entity against
  the concern

  that the U.S. government will never relinquish its
  current management role.

Id. at 8827-28.

Over 650 comments were received in response to the proposed rule. Management of Internet Names and Addresses, 63 Fed.Reg. 31741 (1998). On June 10, 1998, having considered those responses, NTIA published a statement of policy in the Federal Register. Id. The policy reiterated the DOC's desire to shift DNS management to the auspices of a non-profit corporation. The goal was to have the corporation carry out its operational responsibility by October 1998, with the DOC gradually phasing out until the transition would be complete by September 30, 2000. Id. at 31744. One change made in the policy statement from the proposed rule was that the DOC would not implement any new gTLD's during the transition to the new non-profit corporation. Id. at 31746.

On September 9, 1998, NSF and DOC entered into a Memorandum of Agreement pursuant to which NSF transferred responsibility for administering its Cooperative Agreement with NSI to DOC. This was done "to ensure the seamless and stable transition from the existing framework of Internet administration to a private sector management structure as set forth in the statement of policy." (January 12, 1999 Stipulation Ex. A.) On October 6, 1998, NSI and DOC extended the Cooperative Agreement to September 30, 2000 at the latest by agreeing to "Amendment No. 11." Amendment No. 11 provided for NSI's recognition of the new non-profit corporation described in the June 10, 1998 Statement of Policy ("NewCo"); authorized NSI's continued operation of the primary root server during the transition to NewCo; and provided for "the development, deployment and licensing by NSI of a mechanism that allows multiple registrars to accept registrations for the [gTLD's] for which NSI acts as a registry." (January 12, 1999 Stipulation Ex. B.) Amendment No. 11 also provides:

    NSI agrees to continue to function as the
  administrator for the primary root server for the
  root server system and as a root zone administrator
  until such time as the [DOC] instructs NSI in writing
  to transfer either or both of these functions to
  NewCo or a specified alternative entity.

    While NSI continues to operate the primary root
  server, it shall request written direction from an
  authorized [DOC] official before making or rejecting
  any modifications, additions or deletions to the root
  zone file. Such direction will be provided within ten
  (10) working days and it may instruct NSI to process
  any such changes directed by NewCo when submitted to
  NSI in conformity with written procedures established
  by NewCo and recognized by the [DOC].

(Id.)

In the fall of 1998, the Internet Corporation for Assigned Names and Numbers ("ICANN") was incorporated as a nonprofit public benefit corporation in California; its revised Articles of Incorporation were filed November 21, 1998. (January 12, 1999 Stipulation ¶ 4; Ex. C.) ICANN's bylaws were adopted November 23, 1998. (Id. Ex. D.) On November 25, 1998, DOC and ICANN entered a Memorandum of Understanding, pursuant to which they agreed to

  jointly design, develop, and test the mechanisms,
  methods, and procedures that should be in place and
  the steps necessary to transition management
  responsibility for DNS functions now preformed by, or
  on behalf of, the U.S. Government to a private-sector
  not-for-profit entity. Once testing is successfully
  completed, it is contemplated that management of the
  DNS will be transitioned to the mechanisms, methods,
  and procedures designed and developed in the DNS
  project.

(Id. Ex. E, Art. II(B).) ICANN agreed to "[c]ollaborate on the design, development and testing of a plan for creating a process that will consider the possible expansion of the number of gTLD's." (Id. Art. V(C)(9).)

On December 17, 1998, the Court ordered supplemental briefings on the questions of whether, in light of the incorporation of ICANN and the Memorandum of Understanding between ICANN and DOC, (1) this action is now moot; and (2) if the action is not moot, whether it should be stayed, and for what duration. On January 12, 1999, PGM, NSF, and NSI filed their briefs on these questions and entered into a stipulation. That stipulation provided that

  NSF's June and August 1997 written directives to NSI,
  which were a subject of the parties' summary judgment
  briefs, are no longer relevant to the pending
  motions. The parties further agree that for the
  purposes of the pending motions:

    (a) Plaintiff does not challenge the validity of
  the Memorandum of Agreement between the NSF and the
  Department of Commerce (Exhibit A hereto) or the
  statutory authority of the NSF and the Department of
  Commerce to enter into that Memorandum of Agreement;

    (b) Plaintiff does not challenge the validity of
  Amendment No. 11 to the Cooperative Agreement
  (Exhibit B hereto) or the statutory authority of the
  Department of Commerce to enter into that Amendment
  with NSI. Rather, plaintiff seeks a declaration that
  Amendment No. 11 confers no antitrust immunity on NSI
  for actions taken pursuant to that Amendment;

    (c) NSI acknowledges that Congress has not enacted
  any statute that confers express antitrust immunity
  with respect to NSI's activities under the
  Cooperative Agreement, as amended by Amendment No.
  11. Rather, NSI seeks a declaration that implied
  antitrust immunity applies to those activities under
  the "federal instrumentality" doctrine; and

    (d) Plaintiff challenges, under the First Amendment
  to the U.S. Constitution, that portion of Amendment
  No. 11 to the Cooperative Agreement that requires
  written governmental direction before changes are
  made to TLDs included in the Internet's root zone
  file.

(January 12, 1999 Stipulation ¶ 8.)

Discussion

I. Standard of Review

The Second Circuit has summarized the standards for granting summary judgment as follows:

  First, summary judgment may not be granted unless
  "the pleadings, depositions, answers to
  interrogatories, and admissions on file, together
  with the affidavits, if any, show that there is no
  genuine issue as to any material fact and that the
  moving party is entitled to a judgment as a matter of
  law." Fed. R.Civ.P. 56(c). Second, the burden is upon
  the moving party to demonstrate that no genuine issue
  respecting any material fact exists. In considering
  that, third, all ambiguities must be resolved and all
  inferences drawn in favor of the party against whom
  summary judgment is sought. Fourth, the moving party
  may obtain summary judgment by showing that little or
  no evidence may be found in support of the nonmoving
  party's case. When no rational [factfinder] could
  find in favor of the nonmoving party because the
  evidence to support its case is so slight, there is
  no genuine issue of material fact and a grant of
  summary judgment is proper.

Gallo v. Prudential Residential Svcs., 22 F.3d 1219, 1223-24 (2d Cir. 1994) (citations omitted). This motion does not present disputed factual issues so much as disputed legal issues.

II. Plaintiff's Antitrust Claim Against NSI

PGM claims that NSI is liable under § 2 of the Sherman Act, 15 U.S.C. § 2, because NSI has monopoly control of an essential facility which cannot be duplicated and has denied use of that essential facility to PGM despite the feasibility of doing so. Twin Laboratories, Inc. v. Weider Health & Fitness, 900 F.2d 566, 569 (2d Cir. 1990). The essential facility is alleged to be the root zone file.

NSI acknowledges that Congress has not enacted any statute that confers express antitrust immunity with respect to NSI's activities under the Cooperative Agreement as amended by Amendment No. 11. (January 12, 1999 Stipulation ¶ 8(c).) Thus, the issue is whether NSI is entitled to some form of implied immunity. NSI argues that its activities performed under the Cooperative Agreement with NSF (and, now, with DOC, pursuant to the NSF's Memorandum of Agreement with DOC and Amendment No. 11) are immune from antitrust liability because they are performed pursuant to a contract with a federal instrumentality. Resolution in NSI's favor of its immunity defense would be dispositive of PGM's claim against NSI, so the defense is considered first.

NSI argues that because it had a contract with a federal agency-the NSF, and now DOC-the actions it has taken to comply with that contract are entitled to immunity from the antitrust laws. It first notes the long-standing proposition that the Federal Government is not a person for the purposes of liability under §§ 1 and 2 of the Sherman Act. United States v. Cooper Corp., 312 U.S. 600, 607, 61 S.Ct. 742, 85 L.Ed. 1071 (1941). From there, courts have gone on to hold that agencies of the Federal Government are absolutely immune from the Sherman Act's provisions. See Sea-Land Service, Inc. v. Alaska Railroad, 659 F.2d 243, 246 (D.C.Cir. 1981), cert. denied, 455 U.S. 919, 102 S.Ct. 1274, 71 L.Ed.2d 459 (1982) ("the United States, its agencies and officials remain outside the reach of the Sherman Act"); Jackson v. West Indian Co., Ltd., 944 F. Supp. 423, 425 (D.Vi. 1996); Howes Leather Co., Inc. v. Golden, 681 F. Supp. 6, 15 (D.D.C. 1987).

Moreover, private entities under contract with federal instrumentalities are immune from Sherman Act liability for their actions taken pursuant to that contract. Thus, for example, in Sakamoto v. Duty Free Shoppers, Ltd., 764 F.2d 1285, 1288-89 (9th Cir. 1985), cert. denied, 475 U.S. 1081, 106 S.Ct. 1457, 89 L.Ed.2d 715 (1986), the Ninth Circuit considered the case of a business which had an exclusive franchise with the government of Guam to sell specified merchandise to departing travelers at the Guam airport. The court determined that the government of Guam is an instrumentality of the Federal Government and that it was immune from antitrust liability, thus affirming the district court's dismissal of the plaintiff's antitrust claims. In Champaign-Urbana News Agency, Inc. v. J.L. Cummins News Co., Inc., 632 F.2d 680 (7th Cir. 1980), the plaintiff, a wholesale book and magazine distributor, sued a competitor and the secretaries of the Air Force and Army, claiming that the competitor's sale of material to the Army and Air Force Exchange Service ("AAFES") violated the Robinson-Patman Amendments to the Clayton Act. The court found the AAFES is a federal instrumentality and that therefore the special discount it received on goods sold to it by Cummins did not violate Robinson-Patman. "If a particular purchase is exempt from liability under the antitrust laws, both the seller and purchaser in the transaction are exempt." Id. at 693.

The gravamen of the federal instrumentality immunity, as applied to non-Government entities, is that a party to whom an agency of the Federal Government delegates or contracts to perform a function or provide a service is entitled to the same protections against antitrust liability as the Government agency itself. Whether the Government's immunity will also apply to the contracting party, however, depends on the extent to which the Government is acting pursuant to a clearly articulated policy or program. "Private parties acting in compliance with clearly articulated government policies or programs are immunized from antitrust liability to the same extent as the government entity." IT & E Overseas, Inc. v. RCA Global Communications, Inc., 747 F. Supp. 6, 11 (D.D.C. 1990). At least two courts have stated the proposition even more broadly: "`[P]rivate parties, to the extent they are acting at the direction or with the consent of federal agencies, also fall outside the pale of the act's prohibition.'" Agritronics Corp. v. National Dairy Herd Association, Inc., 914 F. Supp. 814, 820 (N.D.N.Y. 1996) (quoting Greensboro Lumber Co. v. Georgia Power Co., 643 F. Supp. 1345, 1365 (N.D.Ga. 1986), aff'd, 844 F.2d 1538 (11th Cir. 1988)).

NSI operates the A root server pursuant to a valid contract with the Government. The basic contract is the Cooperative Agreement, entered into with the NSF and effective January 1, 1993, as amended. On September 9, 1998, NSF transferred responsibility for administering the Cooperative Agreement to DOC, (January 12, 1999 Stipulation ¶ 1), and PGM does not challenge the validity of that transfer, nor does it challenge the validity of Amendment No. 11.

PGM does challenge whether NSF had the authority to contract DNS management to NSI in the first place (Pl. Repl. Mem. at 11) and whether Amendment No. 11 confers antitrust immunity on NSI for actions NSI takes thereunder. (January 12, 1999 Stipulation ¶ 8(b).) However, the Cooperative Agreement was a valid exercise of the NSF's authority under the National Science Foundation Act, 42 U.S.C. § 1861 et seq., and the Federal Grant and Cooperative Agreement Act, 31 U.S.C. § 6301 et seq.

The National Science Foundation Act was passed in 1950 and established the NSF whose mission was, among other things,

    to initiate and support basic scientific research
  in the mathematical, physical, medical, biological,
  engineering, and other sciences, by making contracts
  or other arrangements (including grants, loans, and
  other forms of assistance) for the conduct of such
  basic scientific research and to appraise the impact
  of research upon industrial development and upon the
  general welfare.

National Science Foundation Act, ch. 171, 64 Stat. 149 (1950) (codified as amended at 42 U.S.C. § 1862(a)(1)). A 1968 amendment to the NSF Act authorized and directed the NSF "to foster and support the development and use of computer and other scientific methods and technologies, primarily for research and education in the sciences." 82 Stat. 360 (1968) (codified at 42 U.S.C. § 1862(a)(4)). According to the commentary of the Special Subcommittee on Science of the Committee on Labor and Public Welfare, the purpose of the amendment concerning computers was

  to permit the Foundation to carry on such activities
  in areas not related to science where this is
  necessary or desirable to assure the most effective
  use of computers or other methods and technologies.
  Thus, the word "primarily" is a term of emphasis and
  not of limitation . . . It is our understanding that
  extensions of NSF activities beyond scientific areas
  will generally be in direct "hot pursuit" of
  developments centered in scientific concerns, or flow
  directly from the unified character of the activities
  in question.

Act of July 18, 1968, Pub.L. No. 90-407, 1968 U.S.C.A.A.N. (82 Stat. 360) 2644, 2655.
*fn13

In keeping with this broad mission, in the mid-1980's NSF went on to develop NSFNET. The NSF contracted with IBM, MCI, and Merit to undertake this project. Management of Internet Names and Addresses, 63 Fed.Reg. 31741, 31742 (1998). NSF also supported many of the original technical studies that developed the Internet Protocol. (Pl. 56.1 Stmnt. ¶ 7.) The Defense Department continued to take responsibility for the actual registration of domain names and IP numbers through the 1980's. (Strawn Decl. ¶¶ 27-29.) In the late 1980's, NSF began to support registration services for the non-military network. (Id. ¶ 28.)

In 1991 Congress enacted the High-Performance Computing Act, among whose purposes was to expand "Federal support for research, development, and application of high-performance computing in order to establish a high-capacity and high-speed National Research and Education Network." High-Performance Computing Act, Pub.L. No. 102-194, § 3(1)(A), 105 Stat. 1594 (1991) (codified at 15 U.S.C. § 5502). As part of this project, the NSF was directed to "provide computing and networking infrastructure support for all science and engineering disciplines, and support basic research and human resource development in all aspects of high-performance computing and advanced high-speed computer networking." Id. § 201(a)(1) (codified at 15 U.S.C. § 5521.)

The NSF had the authority to enter into the Cooperative Agreement with NSI and to assign the registration tasks to NSI which could otherwise have been done by NSF itself. The NSF Act itself gives the NSF broad authority to implement its mission. NSF has the authority to "do all things necessary" to carry out the NSF Act's mandate, "including, but without being limited thereto" the authority

  to enter into contracts or other arrangements, or
  modifications thereof, for the carrying on, by
  organizations or individuals in the United States and
  foreign countries, including other government
  agencies of the United States and of foreign
  countries, of such scientific or engineering
  activities as the Foundation deems necessary to carry
  out the purposes of [the Act] . . .

42 U.S.C. § 1870(c).

Also, in 1992 Congress passed the Scientific and Advanced Technology Act which, among other things, amended the NSF Act to give NSF broader authority to carry out its 1968 mandate with respect to computers. The NSF was now "authorized to foster and support access by the research and education communities to computer networks which may be used substantially for purposes in addition to research and education in the sciences and engineering, if the additional uses will tend to increase the overall capabilities of the networks to support such research and education activities." Pub.L. 102-476, § 4, 106 Stat. 2300 (1992) (codified at 42 U.S.C. § 1862(g)) (emphasis added). By allowing the computer networks to be "used substantially for purposes in addition to research and education," Congress gave the NSF the authority to allow other activity, i.e., commercial activity, on the Internet, which will permit an interplay among the research, education, and business communities on the Internet redounding to the mutual benefit of all.

Taken together, 42 U.S.C. § 1870(c), 1862(a)(4), and 1862(g) provide NSF clear authority to manage the DNS. The registration of domain names and control of the DNS are activities which "foster and support the development and use of computer . . . methods and technology," 42 U.S.C. § 1862(a)(4), especially considering the NSF's central role in the development of the Internet from its earliest stages. Moreover, research, education, and commercial entities "access" the computer network known as the Internet in part by registering a domain name. 42 U.S.C. § 1862(g).*fn14

The Cooperative Agreement explicitly drew on NSF's long history in Internet development and also invokes its more recent authority to develop the National Research and Education Network ("NREN").

    Today more than 5,000 networks compromise the
  Internet. These networks link together hundreds of
  thousands of computers and millions of users
  throughout the world. The domestic, non-military
  portion of the Internet includes NSFNET. It also
  includes other federally sponsored networks such as
  NASA Science Internet (NSI) and Energy Sciences
  Network (ESnet). NFSNET, NSI, and ESnet, as well as
  some other networks of the Internet, are related to
  the National Research and Education Network (NREN)
  which was defined in the President's Fiscal 1992
  budget and which has been authorized by the passage
  in December, 1991, of the High Performance Computing
  and Communications Act, Public Law 102-194.

    The NREN is projected to evolve from a part of the
  Internet containing portions of NSFNET, NSI, and
  ESnet. This evolution will reflect the legal and
  technical requirements of the various sponsoring
  agencies. For example, NASA and DOE are mission
  agencies whose networks' traffic must relate to the
  agencies' missions. NSF, on the other hand, is
  chartered to support science and engineering research
  and education; hence NSFNET can carry all the traffic
  contemplated for NREN and may in fact support
  additional traffic as well.

    It is anticipated that all registration services
  required during the period of this Agreement will be
  obtained and furnished under the terms of this
  Agreement and that the definition and provision of
  these services will help facilitate the evolution of
  the NSFNET and the development of the NREN.
  References to NSFNET in this Agreement should in
  general be understood to include the NREN as well.

(Strawn Decl. Ex. F at 1.)

The Cooperative Agreement is a partnership between NSF and NSI that is valid under the Federal Grant and Cooperative Agreement Act, which permits Cooperative Agreements when

    (1) the principal purpose of the relationship is to
  transfer a thing of value to the State, local
  government, or other recipient to carry out a public
  purpose of support or stimulation authorized by a law
  of the United States instead of acquiring (by
  purchase, lease, or barter) property or services for
  the direct benefit or use of the United States
  Government; and

    (2) substantial involvement is expected between the
  executive agency and the State, local government, or
  other recipient when carrying out the activity
  contemplated in the agreement.

31 U.S.C. § 6306. The Cooperative Agreement was entered into to carry out the public purpose of computer network development as authorized by the NSF Act, the High Performance Computing Act of 1991, and the Scientific and Advanced Technology Act of 1992, and the Cooperative Agreement clearly contemplated substantial involvement between NSF and NSI. The NSF did not contract all of its responsibilities for the DNS to NSI in the Cooperative Agreement. "NSF has responsibility for registration services support, support planning, oversight, monitoring, and evaluation. NSF will make approvals required under the
General Conditions and, where necessary and appropriate, NSF will contact and negotiate with Federal agencies and other national and International members of the Internet community to further the efforts of this project." (Strawn Decl. Ex. F Art. 6(B)(1).) NSI was given "primary responsibility for ensuring the quality, timeliness and effective management of the registration services provided under this agreement. To the extent that NSF does not reserve specific responsibility for accomplishing the purposes of this Agreement, by either special condition or general condition of this Agreement, all such responsibilities remain with [NSI]." (Id. Art. 6(A).)

PGM argues that the Cooperative Agreement does not immunize NSI's activities because NSI has discretion to determine whether or not to add new TLD's. (Pl. Mem. at 20-21.) However, that discretion was ceded to NSI by NSF in that part of the Cooperative Agreement which gave NSI "primary responsibility for ensuring the quality, timeliness and effective management of the registration services provided under this agreement." (Strawn Decl. Ex. F Art. 6(A).) Under the NSF Act, the High Performance Computing Act of 1991, and the Scientific and Advanced Technology Act of 1992, NSF itself had the discretion to add new TLD's, and it contracted with NSI to give NSI that authority. Amendment No. 11 to the Cooperative Agreement, entered into by the DOC as successor to NSF, simply took that authority back, removing NSI's discretion to add new gTLD's during the transition period to "NewCo." (January 12, 1999 Stipulation Ex. B.)*fn15 Because NSF and DOC would have had antitrust immunity had they run the DNS and the A root server themselves, NSI is immune for its actions taken pursuant to a valid Cooperative Agreement, as amended. Sakamoto v. Duty Free Shoppers, Ltd., 764 F.2d 1285, 1288-89 (9th Cir. 1985), cert. denied, 475 U.S. 1081, 106 S.Ct. 1457, 89 L.Ed.2d 715 (1986).

When it comes to future development of the Internet and the DNS, the Executive Department has an articulated policy, and Amendment No. 11 was entered into between DOC and NSI in furtherance of that policy. Beginning in March 1997, an interagency group studied domain name problems. (Strawn Decl. ¶ 46; Manishin Ex.'s 13, 15.) On July 1, 1997, President Clinton directed the Secretary of Commerce to "privatize the domain name system (DNS) in a manner that increases competition and facilitates international participation in its management." Management of Internet Names and Addresses, 63 Fed.Reg. 31741 (1998). On July 2, 1997, the NTIA published a request for comments on the issue. Request for Comments in the Registration and Administration of Internet Domain Names, 62 Fed.Reg. 35896 (1997). On February 20, 1998, NTIA issued its proposed rule calling for the transfer of Internet DNS management to a private non-profit corporation. Improvement of Technical Management of Internet Names and Addresses, 63 Fed.Reg. 8826 (1998). NTIA proposed adding five new gTLD's during the transition. Id. at 8831. After considering some 650 comments, NTIA published a Statement of Policy which adhered to the earlier proposal to transfer DNS management to a non-profit corporation but abandoned the idea of adding any gTLD's during the transition.

  The challenge of deciding policy for the addition of
  new domain names will be formidable. We agree with
  the many commentators who said that the new
  corporation would be the most appropriate body to
  make these decision based on global input.
  Accordingly, as supported by the preponderance of
  comments, the U.S. Government will not implement new
  gTLD's at this time.

Management of Internet Names and Addresses, 63 Fed.Reg. 31741, 31746 (1998.) The overall proposal was in keeping with the Government's stated policy to allow the DNS to evolve in an environment of stability, competition, private bottom-up coordination, and representation. Id. at 31743.

The Department of Commerce has noted that much of the development and technical management of the Internet has been by the consensus of Internet users. Request for Public Comment, 62 Fed.Reg. 35896 (1997). This is evidenced, for example, by IETF and the more than 2000 RFC's which have been written and circulated. The NSF and DOC have supported that ethos. For instance, the NSF-NSI Cooperative Agreement stated that NSI must "provide registration services in accordance with the provisions of RFC 1174." (Strawn Decl. Ex. F Art. 3(C).) The Government, having been instrumental in supporting and fostering the development of the Internet and the Domain Name System, now has adopted a clearly articulated policy of getting out of the way in the future and letting the consensus of the Internet community, as articulated through the new ICANN, govern this powerful yet fragile technology. Since it is not entirely clear how the policy will be implemented, it would be inappropriate for this Court to take any action which might interfere with the future steps the DOC may or may not take.

Two other district courts have provided federal instrumentality immunity to NSI with respect to its domain name registration activity. In Thomas v. Network Solutions, Inc., 2 F. Supp.2d 22 (D.D.C. 1998), the plaintiffs challenged the fee NSI collected pursuant to Amendment No. 4 to the Cooperative Agreement to register domain names. Plaintiffs claimed, among other things, that NSI was operating an illegal monopoly in violation of the Sherman Act. The court concluded, "Plaintiffs make reasonable allegations that NSI is a monopolist, but the monopoly results from the Agreement between [NSF and NSI]. Because NSI is acting in compliance with a government cooperative agreement, therefore, it is entitled to immunity from suit under the Sherman Act." Id. at 38. Beverly v. Network Solutions, Inc., No. C-98-0337-VRW, 1998 WL 320829 (N.D.Cal. June 12, 1998), involved a plaintiff whose application for a particular domain name was rejected by NSI because NSI had received a complaint from a third party that the plaintiff's proposed domain name infringed on the third party's federally registered mark. Among other claims, the plaintiff claimed that NSI's monopoly on domain names violates the antitrust laws. After noting that NSF is immune from antitrust liability, the court concluded that "[w]hile NSI is not a government agency, it too is immune from antitrust liability. This is so because private parties acting in compliance with a clearly articulated government program are immune from such liability." Id. at *3.

PGM argues that it does not challenge the lawfulness of NSI's monopoly over domain name registrations under 15 U.S.C. § 1, but only the way NSI allegedly uses its monopoly power to maintain that power, in violation of 15 U.S.C. § 2. (Pl. Repl. Mem. at 23.) However, the federal instrumentality immunity doctrine-distinct from the more limited state action and regulatory activity doctrine cases PGM cites*fn16immunizes NSI against § 2 liability as well as against § 1 liability. The doctrine protects the actions of the monopolist as well as the monopoly itself. Private parties "acting in compliance with a clearly articulated government program," Beverly, 1998 WL 320829 at *3, Thomas, 2 F. Supp.2d at 38, or "acting at the direction or with the consent of federal agencies," Agritronics at 820, are immune from antitrust liability. (Emphasis added.)*fn17

Thus, NSI is entitled to antitrust immunity for its actions taken pursuant to the Cooperative Agreement, as amended. For this reason it is unnecessary to analyze plaintiff's claims that NSI has monopoly control of an essential facility.

III. Plaintiff's First Amendment Claim Against NSF

PGM also challenges "that portion of Amendment No. 11 to the Cooperative Agreement that requires written governmental direction before changes are made to TLDs included in the Internet's root zone file." (January 12, 1999 Stipulation ¶ 8(d).) It claims that that part of Amendment No. 11 is a prior restraint of protected speech in violation of the First Amendment to the U.S. Constitution. The Government has cross-moved for summary judgment arguing that PGM has suffered no constitutionally significant infringement of protected speech.

PGM's motion is denied, and the Government's cross-motion is granted, because the "speech" plaintiff asserts is infringed under Amendment No. 11 is not speech at all. As the Supreme Court has said, "[I]t is the obligation of the person desiring to engage in assertedly expressive conduct to demonstrate that the First Amendment even applies. To hold otherwise would be to create a rule that all conduct is presumptively expressive. In the absence of a showing that such a rule is necessary to protect vital First Amendment interests, we decline to deviate from the general rule that one seeking relief bears the burden of demonstrating that he is entitled to it." Clark v. Community for Creative Non-Violence, 468 U.S. 288, 293 n. 3, 104 S.Ct. 3065, 82 L.Ed.2d 221 (1984). PGM has not met the burden of demonstrating that the three letter top level domain portion of an Internet domain name is expressive speech.

Internet alphanumeric addresses are not speech but are "rather like a telephone number." Reno v. ACLU, 521 U.S. 844, 117 S.Ct. 2329, 2335, 138 L.Ed.2d 874 (1997) (quoting district court opinion). As plaintiff's president said, "[W]hat 1-800-FLOWERS did for phone numbers, pgMedia did for the Internet." (Garrin Decl. ¶ 11.) "Internet domain names are similar to telephone number mnemonics, but they are of greater importance, since there is no satisfactory Internet equivalent to a telephone company white pages or directory assistance, and domain names can often be guessed." MTV Networks v. Curry, 867 F. Supp. 202, 204 n. 2 (S.D.N.Y. 1994).

PGM asserts that domain names are entitled to constitutional protection, but the case it cites for that proposition in fact stands for the opposite conclusion. In Planned Parenthood Federation of America, Inc. v. Bucci, No. 97 Civ. 629, 1997 WL 133313, 42 U.S.P.Q.2d 1430 (S.D.N.Y. 1997), aff'd, 152 F.3d 920, 1998 WL 336163 (2d Cir.), cert. denied, ___ U.S. ___, 119 S.Ct. 90, 142 L.Ed.2d 71 (1998), Judge Wood considered a First Amendment defense to a claim of trademark infringement. In that case the defendant registered the domain name "plannedparenthood.com" and the plaintiff moved for a preliminary injunction pursuant to the Lanham Act. "[Defendant's] use of `plannedparenthood.com' as a domain name to identify his web site is on its face more analogous to source identification than to a communicative message; in essence, the name identifies the web site, which contains defendant's home page." Id. at *11.

PGM argues that its new gTLD's have an expressive purpose because they include core political speech and personal expression. However, Amendment No. 11 does not infringe on the use of the string ".forpresident" in a domain name; it can currently be used as a second level domain behind the top level domain ".com." The same is true of the string "beyondhope" which is asserted to be an example of personal expression; it can be ".beyondhope.com." PGM contends that forcing it to add one of the currently available gTLD's to its preferred domain name constitutes compelled speech. (Pl. Repl. Mem. at 27.) However, if a domain name is like a telephone number mnemonic, then the TLD is like the 1-800 or 1-888 prefix (or any other area code). Far from being compelled communicative speech, the TLD is simply a routing instruction that helps computers find each other.

Moreover, there does not appear to be a requirement that a computer user wishing to establish an Internet site have a domain name at all. This is because domain names serve the sole purpose of making it easier for users to navigate the Internet; the real networking is done through the IP numbers. A user obtains an IP number from an Internet service provider. (Manashin Decl. Ex. 5 at 11.) Then, if he chooses, he may register that IP number-linked to a domain name-with NSI.

Thus, Amendment No. 11 does not violate the First Amendment.

Conclusion

For the foregoing reasons, PGM's motion for summary judgment on Count VI of the second amended complaint is denied as to both defendants; NSI's cross-motion for summary judgment is granted; and NSF's cross-motion for summary judgment is granted.

IT IS SO ORDERED.


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